Product placement is big business, benefiting both movie studios (who get their props for free) and corporate marketers (who gain valuable exposure for their products). Done right, it can be amazingly cost-effective. Leveraged properly, it can drive sales. But the entertainment business can also be unpredictable and occasionally unkind.

When the Teenage Mutant Ninja Turtles order pizza, they don't just call the pizzeria on the corner, they call Domino's. When James Bond decides to trade in his Aston Martin, he replaces it with a BMW Z3, and even explains his decision on-screen. When Jeff Goldblum races to save the world in the movie "Independence Day," the camera lingers for a moment so that the audience can see he's performing his heroics using an Apple computer.

Moments like these may go almost unnoticed by most moviegoers; their impact is largely subliminal. But moments like these are taken increasingly seriously by marketing executives, who see in product placement a low-cost marketing medium that may enable them to reach millions of potential customers in an environment that associates their products with the hip, happening world of entertainment. That's why consumer marketers spent an estimated $50 million last year to earn their products bit parts in movies and on television.

Few members of the audience found it surprising when, in 1944, Dana Andrews was seen drinking an imaginary brand of whisky-called Black Pony-in the noir thriller "Laura," Real brand names were almost absent from the silver screen in its early days. But moviegoers were demanding greater and greater verisimilitude, and only a year later, in the 1945 tearjerker "Mildred Pierce," Joan Crawford was seen downing what was clearly Jack Daniels.

That was just the beginning. Over the next three decades, recognizable brand names appeared with greater and greater frequency in major motion pictures. Audiences expected increasingly more authentic dialogue, increasingly more authentic settings, and increasingly more authentic props, and that meant that the products with which they were familiar in real life were expected to become an equally familiar part of the mise-en-scne.

In some cases, production resources personnel (the people who secure props for movie sets) would go out and buy the necessary products. In some cases they might approach the companies that made those products and suggest that they supply a production with branded goods that would appear on camera-with perhaps a few items left over for cast and crew-in return for the exposure. In very rare cases, companies might even pay to have their products used by the stars of a particularly high-profile film.

Two product placements, both in the early '80s, took the fledgling business and turned it into an industry.

The first was the appearance in the blockbuster "E.T." (1982) of Reese's Pieces, which were used by the movie's child hero to lure the extraterrestrial out of his hiding place. Sales of the candy soared by 66% after the movie opened, and the marketing media were swift to pick up on the story, especially since M&M/Mars had turned down the opportunity to have its M&Ms used in the scene.

"In the old days, before "E.T.," a movie would be greenlighted and the producers would come to the production resources people and ask them to try to get hold of certain products," says Michael Nyman, a partner in Los Angeles marketing communications firm Bragman Nyman Cafarelli. "Then, when the movie was done, they might ask whether there were any promotional opportunities. Now, movie studios might start thinking about potential partners when they have an idea for the script. Our involvement today is very early on the curve. It can be at concept."

The next year, the sleeper hit "Risky Business" provided the next big breakthrough success. The central character in the movie, played by Tom Cruise, wore Ray-Ban Wayfarer sunglasses throughout the movie, and when Cruise hit the big time as a result of his role, so did his shades. Wayfarers become synonymous with cool, and sales tripled. Marketers began to see that a film did not need a big budget to provide big impact.

This is particularly true for products-like sunglasses-that rely heavily on image. The symbiotic nature of the relationship between the entertainment world and such products is summed up by Brenda Goodell, vice president for U.S. marketing communications at Reebok. The athletic shoe company has placed its products successfully in movies like "Independence Day" and "Tin Cup", and somewhat less successfully in the recent "Jerry Maguire." "We live in a world where consumer products can define, or at least be outward badges of, a person's character," Goodell says. "At the same time, a great deal about a brand's image gets defined by who's wearing it and who's using it."

"People want realism," says Dean Ayers, president of the Entertainment Resources and Marketing Association, the four-year-old product placement trade group. "If you have a scene and somebody holds up a can and it says 'soda' on it, the audience doesn't like that. The word that comes up a lot in our work is seamless. That's the way the placements have to function to be successful. We've found that most people do prefer to see a can of Pepsi or some other familiar brand rather than one that says 'Soda,' but nobody wants to pay to see a commercial."

As Ayers suggests, if product placement works best when it is seamlessly integrated into the script and consistent with both plot and character, it works least effectively when it crosses over into overkill. Philip Morris's Marlboro Man character appeared more than 20 times in Superman II, while last year's hit Twister may have gone overboard in its desire to please sponsor Pepsi. In a scene in which the scientists cobble together a device made of empty soft-drink cans to measure the strength of a tornado, almost every can is a clean can of Pepsi. The effect was so incongruous it merited a story in Entertainment Weekly.

Other films have tried to pack too many products into their limited running time. "Back to the Future Part II" was one of the all-time lows, a two-hour billboard that featured plugs for Toyota, Miller beer (an empty can is used to fuel the DeLorean car that becomes a time machine), Nike (in the 21st century, the company's shoes lace themselves automatically), AT&T, USA Today, Texaco (a fully automated service station with logo prominently displayed), Havoline, JVC, Pepsi (rechristened Pepsi Perfect), Pizza Hut, Black & Decker and AT&T again (one of the company's computers controls domestic security systems, while a videophone allows Michael Fox to communicate with his boss.)

Good product placement is appropriate to character-the Teenage Mutant Ninja Turtles love pizza, so it was absolutely natural that the producers of the Turtles movies should team up with Domino's, one of the nation's largest pizza chains-or to plot, as when a Nestle Crunch bar wrapper was at the center of the plot twist that set up an elephant airlift in "Operation Dumbo Drop," or when Tom Cruise consumed cans of Red Stripe lager (a Jamaican brand) while visiting the Caribbean in "The Firm." Red Stripe saw sales jump 50% after that coup.

It helps too if the marketer has a sense of humor and is not afraid to have his or her product displayed in a humorous vein. In "Get Shorty," a 1995 film based on the Elmore Leonard novel, John Travolta rides around Los Angeles in an Oldsmobile Silhouette, referred to (ironically) on more than one occasion as "the Cadillac of minivans." And in the futuristic "Demolition Man," Sylvester Stallone is dropped into the year 2032, where he dines at a Taco Bell and learns that it "was the only restaurant to survive the franchise wars" of the late 20th century. "All restaurants are Taco Bell," Stallone is told.

Silicon Graphics Inc. (SGI) estimates that it obtained $100 million worth of publicity from "Jurassic Park," in which its computers were prominently featured in the eponymous theme park's control room, where cameras lingered on the company's logo. In "Disclosure," SGI's Indigo machines sat on the desks of everybody from secretaries to leads Michael Douglas and Demi Moore. The company is one of an increasing number of high-tech companies turning to the movies for marketing

inspiration. Intel's Intel Inside logo was visible in "The Nutty Professor," while Compaq outfits the lab scenes on television's "ER".

Says Michael Nyman, "Car companies and food and beverage companies have always been the most prominent players in the product placement business, but there are more and more technology products appearing in films. In part, that's a reflection of the kind of films that are being made. Futuristic thrillers, and films that feature a lot of cutting-edge technology are very popular right now."

The master of high-tech product placement is Apple. The struggling computer maker enjoys a cult following in Hollywood, where directors and set designers often specify that characters use the company's Macintosh products. So Apple enjoyed 69 seconds of close-ups in "The Firm" (another Tom Cruise vehicle) and in Steven Seagal's action movie "Under Siege 2" the hero is shown using an Apple Newton to keep in contact with his superiors from a hijacked train. Apple products also enjoyed featured roles in two of last summer's biggest blockbusters: "Independence Day" and "Mission: Impossible".

For Apple, air time is not enough. Placements should illustrate the products' cutting-edge technology, with a particular focus on Internet and multimedia capabilities. SGI, meanwhile, wants people to see its computers doing something important, like molecular biology in the Arnold Schwarzenegger comedy "Junior" or newspaper layout in "The Paper".

"IBM is very focused when it comes to placement," says Bill Buckley, a senior vice president at Los Angeles public relations firm Rogers & Cowan, which represents the computer maker. "We had a producer come to us about using the company's Aptiva computers, which are very black, very sleek, very cool looking, in an office scene. But the Aptiva is geared toward the home PC market, and so we suggested that the production use the ThinkPad, which is a business product, be used instead. It's important that the placement shows the product in the context in which the company intends it to be used."

And it's no longer enough to allow a product placement to stand on its own. BMW's involvement with the James Bond flick "Goldeneye" was probably the most successful product placement since "E.T.," thanks largely to the company's decision to use an integrated advertising and public relations campaign to extend the impact of its role. Both the new James Bond star Pierce Brosnan and Bond girl Izabella Scorupco were featured in the publicity campaign, developed by international PR agency Cohn & Wolfe, while the actor who has played Q in every Bond movie was at the roadster's introduction in Central Park, unveiling the car by exploding a giant crate in which it was housed. In a separate event to mark the vehicle's exposure on "Entertainment Tonight," it was depicted evading ninja warriors and sniper fire before being driven on to the set by comedian Steven Wright.The deal had a dramatic impact on BMW's business, as discounts for the Z3 vanished and waiting lists stretched out for months.

"Good product placement today is entertainment marketing in a much broader sense," says Bill Buckley. "There was a time when our role was simply to drop the product off on the set. Today, placement is only the beginning. Smart marketers are leveraging their placements with promotions and public relations activities. It's much more strategic."

Good marketing can extend the reach of less successful movies, too. When star Charlie Sheen was outfitted with a pair of Luxottica sunglasses for the science-fiction movie "The Arrival," the manufacturer may have been hoping for another "Risky Business," but when the movie failed to take off at the box office, a promotion that included counter cards at the company-owned Lenscrafter chain and a radio campaign in which DJs gave away glasses and movie tickets enabled the company to increase sales significantly. In a similar way, Rogers & Cowan is now working with Calvin Klein to maximize the value of an upcoming movie in which several characters wear the fashion icon's eyewear.

"There's point-of-purchase material that says 'as seen in,'" says Buckley. "We might also use stills from the film in the catalog. Then there's an ad campaign that might include footage from the film, and the opportunity to do something on the Internet. There's a lot of clutter out there, and companies need to work harder and harder to break through."

Alcohol and tobacco marketers are particularly fond of product placement because it provides a mechanism for getting their products into movies and eventually onto television, where they may not advertise directly. At the same time, such companies are particularly sensitive to the ways in which their products are depicted. Beer and liquor marketers do not want to see their products in films in which alcohol is being abused, or in films that feature either underage drinking or drinking and driving.

Rogers & Cowan represents Padron tequila. The agency's script readers, therefore, are always on the lookout for instances in which alcohol is portrayed in a negative light. If Padron is referred to by name, they will ask producers to remove it. If the script does not identify a brand they will monitor the situation to make sure that the script is not changed to make the reference brand specific.

Says Buckley, "We have had situations in which the product was being used inappropriately. In one instance, we felt the Padron drinker was an unfavorable character. He certainly did not fit with the demographics Padron is marketing to. We let the producers know that Padron was not going to give clearance for the product to be used in that way, and in the end they used something else."

Not every marketer is so lucky. Automobile manufacturer Lexus, for example, got some unwanted exposure in the drama "Grand Canyon", when Kevin Kline's car broke down early in the movie, leading to a fateful encounter in a bad neighborhood. Lexus did not give permission for its product to be used in such a context, but the movie's producers simply purchased a car-rather than borrowing one from the company-and thus were able to use it as they saw fit.

McDonald's, says insiders, was not pleased to be featured in an extended conversation between hit men John Travolta and Samuel L. Jackson in Quentin Tarantino's "Pulp Fiction," but it was considerably happier to be used as the backdrop for about a third of the romantic comedy "Bye Bye Love"-it even lent the producers of the movie its existing advertising set-and to appear as RocDonald's in "The Flintstones," a placement that was complemented by national advertising and a Dino Meal promotion.

In "Natural Born Killers," last year's Oliver Stone film about a killing spree by a couple of crazy newlyweds, Coca-Cola's polar bear ad, approved for use in one part of the film, turned up elsewhere, in close proximity to a decapitated, bloody body. Director Oliver Stone was apparently making a connection between commercialism and capitalism run amok and increasing levels of violence in society. The association left Coca-Cola marketing execs feeling betrayed, said spokesperson Bob Bertini. "From a practical standpoint there was very little we could do," he says. "We did not want to add to the controversy" by suing.

The most recent illustration of the unpredictability of product placement-its biggest downside, say insiders-involved athletic shoe giant Reebok, which provided the producers of the Oscar-nominated sports agent saga "Jerry Maguire" with more than $1.5 million in merchandise, advertising, promotional support and other benefits. For its trouble, it found itself on the receiving end of a series of bitter tirades by the film's co-star, Cuba Gooding, Jr., who believes that the company has ignored the marketing potential of his football talents. Reebok says Tristar Pictures, which made the film, had promised a big payoff: the closing credits were supposed to scroll by against the backdrop of a Reebok ad featuring Gooding's character. Because that scene never made the final cut, Reebok is now suing Tristar for more than $100 million.

The lawsuit clearly illustrates the unpredictability that can make product placement such a high-risk marketing activity. Reebok says it believed-until it was notified otherwise, 16 days before the film was due to open-that the ad was promised in return for all of its support. Tristar says it was always understood that the film's director would decide which scenes would make it to the big screen and which scenes would end up on the cutting room floor.

The other unpredictable element is audience reaction to the film itself. Land Rover built 31 futuristic vehicles for the futuristic Sylvester Stallone actioner "Judge Dredd," which many expected to replicate the success of "Demolition Man". "The storyline was very attractive to us," said Ian Mulingani, promotions manager at Land Rover, shortly before the film's opening. "The image of being the last car on earth is very powerful. It's an expression of the core marque values of guts and supremacy." With the exception of Dredd's motorcycle, every vehicle in the film carries the logo on its side. The film received dreadful reviews, and audiences stayed away in droves.

The unpredictability can be reduced if marketers get involved with a production at an early stage and work closely with the studio. While the final say about what ends up on the screen will always belong to the director-that's why most product placement deals involve the supply of goods and services, rather than cash payment-most producers are anxious to cooperate with potential marketing partners.

"Home Alone 2" was a rare film in which the script was altered at the request of a corporate partner. Originally, the Macauley Culkin character ended up in New York, instead of with his family in Florida, because of a mix-up at the American Airlines ticket counter. In the final version of the film, he follows a man dressed like his father down the wrong gangway, crashes into the flight attendant and sends all the collected tickets flying, and ends up on the wrong flight. The altered scene worked better for the airline, and was also more in keeping with the comedic style of the movie.

The same thing has happened on television. A couple of years ago, Junior Mints were featured in an episode of "Seinfeld" in which, as a result of a comedy of errors, one of the candies ended up inside a character on an operating table. Not only did Junior Mints make it into the show but the brand's then-corporate parent Warner Lambert and its product placement firm AIM Promotions persuaded the producers to change one of the last lines of the show. Instead of a doctor refusing a Junior Mint with the warning, "Never touch the stuff. It will kill you," the same character now takes the candy and says, "These can be very refreshing."

Indeed, product placement is becoming more prevalent on the small screen, where Federal Trade Commission regulations designed to prevent the blurring of entertainment and advertising have traditionally restricted its use. In addition to Seinfeld, which has featured Junior Mints and Saab (in an episode that centered around the lead character's neglect of his car), there's Friends, which has a long-standing association with Coca-Cola. Even J&B has made its way onto television, via "Cybill".

Major League Soccer, a Rogers & Cowan client, recently began a campaign to persuade producers that its merchandise should appear in certain TV shows. Says Bill Buckley, "If a show is set in a city that has a Major League Soccer franchise, that's an opportunity to see the stars of the show wearing MLS apparel in whatever the home team's colors are." The fledgling league was particularly successful in getting its products featured in "Seventh Heaven," which was set in Tampa.

The product placement trend even extends now to the legitimate theater. Lucent Technologies has recently placed its cellular phones in the hit Broadway musical "Rent."

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